Ed Miliband will today promise to tear up Lady Thatcher’s legacy of a free
market economy if he becomes Prime Minister despite claiming to be inspired
by her example.

The Labour leader will use a keynote speech to argue that Britain needs a new economic model that rejects the “orthodoxies of the 1980s”, such as the dominance of the financial services sector over heavy industry.

He will tell the Scottish Labour conference in Inverness that it was clear when Lady Thatcher came to power in 1979 that the old economic model was no longer working and voters wanted change.

This is true again today, he will argue, before promising to create a “new settlement which can unite the country”. Mr Miliband will conclude the “in-it-for-yourself, laissez faire, deregulated economy just isn’t working for most working people”.

Although he expressed his “deep disagreements” with Lady Thatcher’s policies, he will say that his decision to attend her funeral on Wednesday demonstrated that he was a One Nation political leader.

Mr Miliband will argue that this principle defines his leadership of the Labour Party and how he would lead the country as Prime Minister.

“You know the similarities between what was happening in the 1980s and what is happening today under a Conservative-led government. Back in the 1970s, it was clear the country needed a new way of doing things – a new settlement – and so too today,” he will tell delegates.

“The old way of running our economy just doesn’t work anymore: deregulation; the dominance of finance over industry; allowing large private sector vested interests to flourish; government getting out of the way in the economy; the promise that the majority would always do well from an in-it-for-yourself, laissez faire, deregulated economy just isn’t working for most working people.”

Mr Miliband will suggest there are parallels between the industrial and economic turmoil that allowed Lady Thatcher to win the 1979 general election and the “circumstances now” that could return his party to power.

He will attack David Cameron for pursuing a failed economic plan using “old solutions” such as tax cuts for the rich that assume that wealth trickles down from the top.

Calling for a new economic settlement, he will claim future prosperity will depend on the average working Briton, whom he described as the “forgotten wealth creators”.

Following criticism from Tony Blair about his lack of policies, a Labour spokesman said he will highlight “concrete” solutions for how this overhaul can be achieved.

Mr Miliband will also use his visit to Scotland to accuse Alex Salmond of pursuing the “same divisive politics” as the Conservatives, albeit for different ends.

“He divides between the people of Scotland and the rest of the United Kingdom – a narrow nationalism that somehow believes we’re stronger apart than together,” the Labour leader will say.

The First Minister has claimed Lady Thatcher’s legacy in Scotland was devolution as voters became increasingly disgruntled with London rule. However, Mr Miliband will argue that it was the Labour Party that created the Scottish Parliament.